Share your story - If you have been affected by a contract administrator (CA)’s unfair decision-making, then please contact the FMB at gordonnelson@fmb.org.uk. The FMB is currently working to determine the extent of this issue across the UK so any members who can provide feedback will help to support all members in the future.
On pages 32-35 of the February / March edition of Master Builder magazine you can read the full article which includes case studies from some FMB members who have been severely impacted when the CA on a building project is also the architect. The repercussions of the unfair actions by some CAs have been significant, impacting the health and finances of FMB members.
This is why the FMB is reaching out to all members to find out how widespread this issue is.
What is a CA? Who can be one?
It's important to point out that for a wide range of building projects, FMB members can and do contract directly with the client, without the need for a CA.
The FMB suite of contracts, for example, only includes mention of the CA in commercial projects, not domestic contracts; however, there are larger or more complex building projects delivered by members for domestic clients where a CA is required.
As it stands, the CA role can be assumed by the architect, engineer, building surveyor, QS or any agent of the employer. The contractor could even be the CA assuming they belong to a membership body with chartered status.
What is essential is that the CA – even when appointed and paid for by the client – must act independently and impartially when making decisions such as whether the works are complete or the final payments due.
Unfair treatment of builders
What happens if the CA acts unfairly against you, the builder, and the relationship sours?
In one case the CA (who was also the architect) – on multiple occasions gave an FMB member inaccurate drawings – issued only verbal instructions, causing further delays, and resulted in the client’s QS not signing payments to the member as there was no official and written instruction from the architect.
It took three and a half months before the construction contract was produced and signed by the architect and the FMB member. The architect then told the client to move into the house without consulting the builder who would not have permitted this given the state of the house.
The client was unhappy with the work, resulting in overwhelming stress for the builder, causing him to suffer a stroke and be hospitalised four times in the year. He lost his overdraft facility at the bank and is experiencing cash flow issues.
Because the architect is also the CA – who is meant to act in an impartial way – and has chosen to act unfairly to protect themself, the builder had no real pathway to pursue the issue other than to complain to the architect’s professional body.
FMB member Alastair Raitt, Chief Executive Officer of H M Raitt & Sons Ltd and National Board Representative for Scotland, says there are clear cases of conflict of interest when the CA is also the architect:
‘There is often a precedent whereby the architect will not issue an invoiceable instruction, which would pass the cost (unfairly) on to the client, but will issue a rectification notice, the cost of which will probably be borne by the contractor, despite following previous instructions correctly.’
The ‘normal procedure’ would be for the CA to review the issue and give an acceptable and fair, independent view of instruction and fiscal responsibility through the contract conditions.
‘In instances where the architect is the CA, there is clearly a conflict of interest as few will find in favour of the contractor, and will defend their own position as the architect,’ Raitt explains.
What can contractors do?
Angus Reid-Evans, Director of Spey Building & Joinery in Kingussie and member of the Scotland Board, says:
‘If the contractor doesn't agree with the architect’s instruction, there's next to nothing they can do. If they don't fulfil it, they get served with a notice of default. Contract termination follows. You're out the door and there's nothing you can do about it.’
Currently, the best a contractor can do is use whatever contract mechanism is in place – notices of default, letters of concern etc – to register their complaint to the relevant person.
Reid-Evans says: ‘On a contractual level, it has to change. It's ridiculous. The industry has moved forward in leaps and bounds in terms of saving the planet, energy performance, the durability of the property, but contracts have hardly moved.’
CA skills are lacking
There’s the obvious conflict of interest arising when a contractor queries the design of the architect. Then there is the issue of skills, says construction lawyer Sarah Fox of 500 Words, who has trained many people to become CAs.
‘Valuation of works is not the architect’s skill set; it’s the role of a QS. The problem is the role of CA encompasses a lot of skills – some transferable, some technical, which architects may not have… ultimately bad CAs will cost the contractor more money.’
Fox also said ‘Contract administration is misunderstood. The FMB is raising the issue and that’s positive for the sector because a lot of professional bodies whose members are CAs have a vested interest in not upsetting the current way things are done.’
Members can also access a set of questions to ask the CA before you take on a project, along with a CA checklist to make sure all parties agree to how the CA role should be administered.
Authors
Gordon Nelson
Director, Federation of Master Builders Scotland
